|
An Ohio court ruling could require auto insurance companies to include lost value to damaged vehicles as well as the cost of repairs. This could spread to other states. It sounds like a good thing for Ohio auto owners, but the question is who will pay for the extra costs incurred by insurance providers. Most of us know what happens to the value of our vehicles once they've been wrecked. Heck, I refuse to buy a used vehicle that's been in any accident because there are simply to many unknowns.
An Ohio state appeals court found that Duke and Cheryl Rakich where entitled to compensation of reduced value to their GMC Yukon which they purchased new in 2003 and was broadsided a few months later. They purchased the vehicle for $49,000, and Nationwide insurance payed $8,000.00 for damages caused by the accident. However, when they decided to resell the vehicle, they received offers of about $6,000.00 less than the vehicle would have been worth if it had not been involved in an accident. The July 24 ruling by the 10th Ohio District Court of Appeals in Columbus said the Rakich's could ask for more than the repair costs and include their vehicles "diminished value".
For years, insurance companies have fought against paying diminished value. The Rakich's attorney, Scott Smith, says this could mean millions of dollars for consumers who didn't know they could file claims for the loss of value to their vehicles. He goes on to say This is a windfall the insurance industry has received over the decades,'' Smith said. "The insurance industry has been unjustly enriched for not paying what they should have paid. Nancy Stelzer, a Nationwide spokesperson, said that she couldn't comment on pending litigation. However, the company has until Sept. 8 to appeal to the Ohio Supreme Court. If the Supreme Court upholds the appeals court's ruling or refuses to hear the case, other Ohio lawyers could use it to seek payments for diminished value. Dean Fadel, vice president of legislative affairs for the Ohio Insurance Institute, said that some auto insurance companies already pay diminished value by compensating auto owners based on sale prices of similar vehicles in the same area, and this did not represent a major change in state policy. Department Director Mary Jo Hudson said The Ohio Department of Insurance is waiting to see if Nationwide appeals to the state Supreme Court before issuing an opinion on the appeals court ruling. With the possibility of Ohio auto insurance providers having to pay out millions more than they're used to, the question remains: Who will pay the extra expense. This driver seriously doubts companies like Nationwide will fork over the extra costs without passing in on to the consumer in the form of higher premiums.
Related Items:
|
